“Forget Volume:” After Work Talk With Johan de Nysschen, CEO Of Infiniti. Part 2

In Part 1 of our talk with Infiniti CEO Johan de Nysschen at his new office at the Infiniti world headquarters in Hong Kong, we talked about his new job, about new directions for Infiniti, and for the brand. In the second part, we talk about the new cars Infiniti will bring, where they will be made, what engines will be in them, and what deNysschen thinks about the plan to sell half a million by 2016. In April at the Beijing auto show, Nissan's Andy Palmer said he wants to see 500,000 Infiniti sold by 2016, while conceding that this is "an aggressive target." In the last fiscal year, Infiniti sold 141,000 units worldwide, 105,000 of those in the Americas. In carefully crafted words, de Nysschen explains what he thinks of the 500,000 unit target: "Forget volume. Whether those 500,000 come in 2015 or 2018 is less important. We are building a brand. If you put the volume first, and every day when you go home you check whether you hit the scoreboard, that forces you into a more short term orientation." As strong product portfolio "is the very core of establishing a brand," says de Nysschen, and he wants more and better product. Already in the pipeline is a "new compact premium model that we will position below the current G as a car that will be manufactured in Europe." De Nysschen does not want to comment on reports that this compact premium is being developed together with Daimler, and that it will be built at Magna-Steyr in Austria, but his face says that the reports are not delusional. A second new Infiniti "is in the consideration phase, not yet in the decision phase," but when it is decided, then this car "potentially could, I say COULD be manufactured in Mexico." Why not in the US? Because Mexico has a free trade agreement with Europe, the U.S. has not. There definitely will be an Infiniti to be built in China, actually two, as a start. "We have to expand our footprint in China," says de Nysschen. "China has got to be a new volume hub for us, and a prerequisite for a volume hub is localization." Despite the disclaimers, de Nysschen states that "so now already we have three other factories that would complement the production in Tochigi." Tochigi is Nissan's plant north of Tokyo that currently produces most Infiniti models, all for export. Straining under the high yen, this is an expensive proposition, and producing in three locations outside of Japan will make the yen more palatable.. De Nysschen is outspoken in his demand for a halo car: "I want to have a product that will be emotionally appealing, and also very premium, and which very easily will draw a great deal of attention." Tying de Nysschen down to something more specific becomes a bit of a fencing act with a very agile opponent. No, it won't be what at Audi he would have called a "D-class" car or "what we call the F segment here. That is a market segment that is populated by the S-Class, the 7-Series, the A8. No, I don't think we want to enter that segment, it is overpopulated, its customers tend to be very conservative and very brand loyal." Then what? De Nysschen feints, throws out a few other segments where "Infiniti has white space," from crossovers to "wagons for Europe." When I suggest that a high end Infiniti sports car could surely be very appealing and would draw a lot of attention, de Nysschen stops me in mid-sentence, issues a warning look and says: "Let's leave it at that." Cut off, I am unable to elicit whether the aspirational auto will be one of the four aforementioned, or whether it will be a fifth one. With the Nissan GT-R, with a possibly resurrected Renault Alpine Berlinette, and with talk about possibly another sporty luxury brand residing under Renault, there should be enough DNA around for a successful super-sport cross-fertilization. It could do Infiniti good. While we are busy creating new rumors, de Nysschen takes the opportunity of squashing old ones. Before he does that, de Nysschen paints a hyper-realistic picture of Web 2.0 car journalism: "One reporter reads or hears something, he interprets it in a slightly different way so that he can report it uniquely and originally, and by the time the 20th reporter does that, we have something that it is very distant from the truth." True, true. A prime example of those twenty degrees of separation are recent reports that Infiniti wants to deprive the world of the V8. Emphatically not true, says de Nysschen. He won't "instruct our development engineers to design a new 6 liter V8." But kill the current V8s? Heavens, no. Actually, he praises the wisdom of U.S. lawmakers that prevented wholesale murder of the mighty mills: "With the way the American legislation has been formulated, with trucks in the American definition having to comply with a different set of requirements than passenger cars, there will be less urgency to phase out the big V8s." The V8s also could be made more efficient, as an ecologically responsible de Nysschen quickly adds. But in the very long term, de Nysschen thinks that big bad engines definitely could be endangered species:  "One of the inevitable phenomena that comes with wanting to reduce the carbon footprints, and reduce emissions and consumption, is that that displacement will come down and that the vehicles will become lighter without compromising on performance. In the long run, I could imagine that the high performance ICE of the future will be a smaller displacement V6 that probably uses turbocharging technology and a whole host of engine management, extracts a great deal of power and in the combination with lighter weight gives a vehicle with improved handling dynamics and lower fuel consumption without sacrificing one grain of driving enjoyment and performance." While the world will not be deprived of V8-powered Infinitis for the foreseeable future, de Nysschen needs smaller engines fast. When he was touring dealers and regions, one question was asked again and again: Where are the four cylinders? At that, de Nysschen gets, well, stimulated: "We need an extension of the available powertrains. We need smaller capacity 4 cylinder engines for China, Europe, and the U.S. In the U.S., where one would think big powerful engines are common, half of the BMW 5-Series sedans are bought with small engines. Same with the 3-Series. With the Audi A4, the take rate for four cylinders is 80 percent. We don't have anything to play. We need the same for Europe where the penalties for powerful engines with the CO2 taxation is quite large, and of course, we need diesel. You can't play in Europe without diesel." Working at an Infiniti that is owned by Nissan, de Nysschen is daily asked to render a confession of faith in the electric vehicle, and he is ready for it before I am done asking the question: "Every car company right now should be working on some form of electric vehicle. If they aren't, they are going to be behind the curve. That does not mean that we want to have an Infiniti version of the Nissan Leaf. We have our own ideas of what we want. The young premium consumers are very progressive and forward thinking in terms of technology. I want to make sure that Infiniti has a compelling offering for that audience as well." Also, says de Nysschen, as a future big player in China, Infiniti must be ready for stringent requirements in terms of emissions and consumption. The sun has set somewhere over China as I ask de Nysschen a last question. How does he feel that Infiniti cars don't get sold in Japan? Does he want to change this? "Philosophically, I would say the answer has to be yes. Ironically, we take models that are unique Infiniti platforms, developed for Infiniti, and in Japan, we put a Nissan badge on them. I want to go and speak to my colleagues who are responsible for the Japanese domestic market and explore a way in a pragmatic manner in which we can respect their needs and their expectations and their requirements for the Nissan dealer network, but also that we can give Infiniti the opportunity to establish the brand in its home market." After emigrating to Hong Kong, Infiniti might finally come home to Japan. from The Truth About Cars http://www.thetruthaboutcars.com

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